“Dealing With Corruption Is Simple, Just Say No”

Published 10 years ago
“Dealing With Corruption Is Simple, Just Say No”

He is Africa’s king of telecommunications. He’s a frontrunner in fiber optics. And he operates the continent’s largest satellite communications business. Add fixed and enterprise networks to the mix and you get Econet Wireless Group, one of the largest telecommunication companies in the world. This is the life story of a man who rose from a poor village in Zimbabwe to take a seat at the top table of world business.

As the company’s founder and executive chair, Strive Masiyiwa is writing entrepreneurial history. His Econet Group is a celebrated example of how to make it in Africa, through constant re-invention and persistent expansion into new countries and sectors. It has earned him a personal fortune of $600 million, according to FORBES.

With well over 30 million mobile customers, thousands of corporate clients and almost 6,000 employees, Econet generates an estimated $3 billion in annual revenue—and that’s probably a conservative figure.


The group has operations and investments in 17 countries, mainly on the continent, as well as in Europe, the United States, Latin America and Asia-Pacific.

Communications technology is written across Masiyiwa’s heart. He already understood in the early 1990s that the opportunity to use mobile phones to drive change in Africa is enormous: the continent is the world’s fastest growing market for cellular technology.

Twenty years ago, less than 1% of Africans had a telephone. Today, the once dark continent is the talking continent, with three out of four Africans owning a cell phone. It’s one of the most phenomenal business successes in the continent’s history.

“There are more cell phones in Africa today than in Europe. More Africans access the internet via the cell phone than Europeans,” says Masiyiwa.


But Econet’s telecoms interests stretch well beyond mobile phones. Recognizing the growing need for data on top of voice services, Econet has expanded into fiber optics infrastructure.

“It’s important to move with the changes taking place in our sector. It’s no longer sufficient to just provide voice. People have increasing data requirements,” says Masiyiwa.

Econet’s British subsidiary, Liquid Telecom, now runs Africa’s longest network across 14 borders from Cape Town, via Kigali, Kampala and Nairobi all the way up to Mogadishu.

Its fiber optics customers are mainly large corporations, including mining and oil companies, internet service and mobile providers, as well as banks.


“It’s about staying ahead of the curve,” says Masiyiwa, listed by FORBES as one of the 20 most powerful African entrepreneurs in 2011.

Over the years, he has become known for having a nose for investments and to sniff them out early: African internet users—who have a growing need for data—have increased ninefold since 2003.

“There’s a tsunami of data. People talk less on their cell phones than they use data. The traditional cell phone networks can’t carry that. You just have to look post-voice,” Masiyiwa says.

To provide a visual image of this data tsunami, if you stacked up the total global data, he says, it would reach 2.5 quintillion bites. About 90% of that was generated in the last two years alone.


Econet’s fiber optic expansion through its Liquid Telecom arm is fairly aggressive, according to TechCentral editor Duncan McLeod.

“They are plugging in a very big gap that exists in Africa,” he says.

“Masiyiwa is a shrewd operator who is very connected and understands the market as well as the conditions on the ground. He knows how to operate in tough business environments and how to make the best of it.”

Diversion of investments is part of that strategy. And whatever Masiyiwa sets his mind on, he does it well. Econet operates Africa’s largest satellite communications business, provides fixed networks, enterprise networks, payment technologies to banks across the continent and has investments in insurance, Coca-Cola bottling plants, hotels and safari lodges.


Yet another arm, Econet Solar, is growing rapidly, offering products from solar lanterns to home power stations to bring lighting to off-grid communities.

It all looks like a smooth ride in hindsight. But it took Masiyiwa years of hard work, persistence and heaps of faith.

He got his first glimpse on what makes a successful entrepreneur when helping out in his mother’s furniture business in Zambia, after the family fled Zimbabwe—then called Rhodesia—in 1965 to escape Ian Smith’s regime after the declaration of independence from Britain. From the age of seven, Strive, his brother and his sister helped out in the workshop, which helped pay them through boarding school in Edinburgh.

“My mother manufactured and sold her own furniture. She was very good at it. It was a typical African family business. You are part and parcel of what goes on in it. I learnt a lot of the basics from her, including the importance of hard work,” he recalls.


Masiyiwa applies these principles to this day. Although Econet is far from a family business, it follows the ethos of his mother’s small firm: people first.

“The most important aspect of a business is its people; how you motivate them, how you keep them. Those are enduring principles,” he says.

Even though Masiyiwa had left his home country at a young age, he always longed to return to Zimbabwe. After he finished school, he planned to join the guerrillas in the armed struggle against Smith’s ruling white minority. He realized that an education might be a better tool to wage the war against injustice.

He studied engineering in Britain instead and returned in his early twenties to what is now Zimbabwe, run by Robert Mugabe’s Zanu-PF, to work for the national telephone company, ZPTC.

“I decided that it really wasn’t for me to work for an enterprise, so I started my own business. Because there were no opportunities in telecommunications, I changed sectors and started a construction firm,” Masiyiwa says.

Retrofit, his construction business, was soon snapping up lucrative government and private sector contracts throughout Zimbabwe.

“Even if you visit Harare today, there is hardly a major building that I wasn’t involved in,” says Masiyiwa.

Strive Masiyiwa, Chiarman of Econet Wireless. Photographed in London this afternoon.

Trained as a telecommunications engineer, Masiyiwa’s ears pricked up in the early 1990s when people started talking about mobile phones. Despite his success in construction, he decided to bet on wireless communications.

“As soon as I saw that the telecommunications sector was opening up, I began to pursue that,” he recalls.

The hitch: state-owned ZPTC had a monopoly. When he approached his former employer in 1993 with plans for a wireless joint venture, they said no, refusing him a license.

Instead of giving up, Masiyiwa thought of plan B. He came up with the idea of telecommunications as a beacon of freedom.

“Being able to talk to someone on a telephone is part of freedom of expression, I thought. That means that monopolies restrict freedom of expression,” he says of his ruse.

Thus began a five-year constitutional court battle, which brought Masiyiwa international prominence, but made him rather unpopular with his government. It was also the end of his flourishing construction business. As soon as he took on Mugabe, doors slammed in his face.

“The day we filed the case, every single contract we had with any government organization ended,” he says.

The intelligence men and the police made life even more difficult for Masiyiwa, his wife and six children.

To keep financially afloat, he eventually sold Retrofit, back then the biggest company in Zimbabwe.

“I scrambled to sell the business because it was in court against the government. When I eventually found a buyer, he said I needed to resolve the dispute first. But I couldn’t wait years, so I set up a new company, Econet, and transferred the litigation to the new company,” he says.

It was a tough time, but what made him hang in there was his irrevocable Christian faith. The constitutional battle coincided with a spiritual awakening, says Masiyiwa.

“When I was in my mid-thirties, I came across the bible and made a commitment to become a Christian and live life according to certain values,” he says.

“When you have faith, you don’t see obstacles. Knowing God was on my side, I never had a sense of struggle,” Masiyiwa, a born-again Christian, says while explaining why he never faltered despite the financial stresses and intimidation.

Masiyiwa, who grew up in a non-religious family, is now a member of a tight-knit church community.

“In fact, it was the church that carried me through. They rallied behind me in an extraordinary way,” he recalls.

Many Zimbabweans supported Masiyiwa’s case against the government. Ordinary people would walk up to him on the street to offer their solidarity, promising to never own a cell phone until he was allowed to operate in the country.

When the court eventually ruled in his favor, in December 1997, removing the monopoly, Econet shot up to become a market leader only six weeks after being licensed. Masiyiwa soon became Zimbabwe’s first US dollar millionaire.

He never forgot the support he received during this difficult time from his church and his people. Every year, Masiyiwa donates a sizable chunk of his annual income to his church. He also listed Econet’s Zimbabwean subsidiary partially on the Harare Stock Exchange—Econet otherwise remains a private business.

“When I got my license, I felt I had to give those who supported me an opportunity to be owners in my company. I wanted them to be more than just customers. So, I sold 40 percent of the subsidiary and kept the rest. I decided it was the best way to show my appreciation,” he says.

“The response was phenomenal. We have the largest and widest ownership of any company.”

Not only Zimbabweans, but people across the continent can be grateful to Masiyiwa. The case was a milestone in opening up Africa’s telecommunications sector to private capital, making mobile phones affordable.

It was also Masiyiwa’s stepping stone for creating an Africa-centered global corporation.

He launched all over the continent; from Botswana to Lesotho, Burundi, Rwanda, Uganda and eventually South Africa, where he relocated in 2000. Today, he lives between Johannesburg, where Econet is headquartered, and London, where his family lives.

Botswana was the first step of Masiyiwa’s expansion strategy, even before he moved to South Africa. He set up Mascom, short for Masiyiwa Communications, a consortium to launch Botswana’s first cell phone company, and won a public tender called by Botswana’s government. Shortly thereafter, he bought Lesotho’s public telephone company.

“I became known for putting consortia together, because we didn’t have a lot of our own capital. In each country, I found partners and put a strong offer together,” he says.

“To be successful as a business in telecommunications, I had to leave Zimbabwe. And that had nothing to do with politics. Zimbabwe is a small country. There was only so far I could go. Since I had a great management team in Zimbabwe, there was no need for me to hang around there.”

Masiyiwa never set foot in Zimbabwe again, but he never forgot the people he left behind. Ever the defender of freedom of expression, he made a personal loan in 2000 to the country’s then only independent newspaper, the Daily News, which was shut down by the government three years later.

His reputation as an entrepreneur who takes mobile phones to the people, and doesn’t take no for an answer, has spread.

“One day, I got a phone call from the Maori in New Zealand, who had read about my battles in Zimbabwe. They wanted me to help them to bid for an empowerment license for a mobile operator,” he says.

Since Masiyiwa likes a bit of a challenge, he packed his bags and flew to the Pacific. With the help of his battle-hardened team, he got New Zealand’s indigenous people their license. They treated him like a hero and to his pride and joy, the company, 2degrees, remains successful to this day.

Masiyiwa returned to South Africa to pursue his own ventures. He had set his sights on Kenya where the government had put the national telephone company up for tender.

“We won it, but the people who were in office had strange ideas about how to do business. After a very inappropriate proposal came through, I said ‘Thank you, but no thank you’ and called the deal off,” Masiyiwa says.

It was the beginning of his fervent crusade against corruption. Masiyiwa abandoned more than a handful of lucrative but non-transparent government tenders in Nigeria, Malawi and Cameroon.

“Dealing with corruption is simple. You walk away,” he says, claiming he has never paid a bribe and simply says no.

“It’s not the end of the world if the deal doesn’t happen. I have no regrets.”

He has to admit, however, that he was at times persecuted for his tough stand against corruption and at other times had to wait years to launch operations in a country because corrupt officials were blocking his way.

In the example of Kenya, his resolve and patience eventually paid off. A couple of years after walking away from the tender, elections replaced Kenya’s leadership.

“The new government called me and asked me to bid for another license, promising it was going to be open and transparent. I bid and won that tender and began to build a new business in Kenya, which I subsequently sold to (French mobile provider) Orange,” he says.

Instead of wasting his energy on dodgy deals, Masiyiwa poured it into staying on top of his game in Africa.

Masiyiwa is quite a visionary, who must not be underestimated in any way, says Arthur Goldstuck, director of business technology research firm World Wide Worx.

“He created a real pan-African business in a sector dominated by foreign firms and foreign investment. What makes Masiyiwa unique is his pan-African approach while also branching out elsewhere in the world. He doesn’t see Africa as a limitation. That’s very rare.”

Whoever thought Masiyiwa was just about earning top dollar couldn’t be more wrong. When he turned 50 three years ago, he decided to spend half of his time promoting entrepreneurship and social development in Africa, with projects ranging from health to education and agriculture.

“While I’m still interested in the growth and development of my business, I only spend half of my time on it. It was a very deliberate decision,” he says.

Among many other initiatives, Masiyiwa helped to develop a $50 tablet for disadvantaged students, which will be rolled out this year in universities and colleges in Rwanda, Zimbabwe, Burundi and Lesotho. He also developed solar-powered cell phone chargers for communities without electricity and launched affordable weather-indexed insurance schemes for smallholder farmers.

But most importantly, Masiyiwa works towards making mobile telephony more affordable for the average African. Without communications technology, people are unable to become part of their country’s economic growth, he says.

Years ago, he invented the free ‘call me’ messaging service for subscribers that have run out of airtime. Econet’s latest initiative is tariff zoning based on capacity utilization so that customers in poor rural areas are charged lower tariffs than those in wealthier urban areas.

“I believe that meeting the needs of ordinary people is not mutually exclusive from being a successful, profitable business. We are in constant search for creating greater value for our customers. We are constantly developing products and services that break the barrier,” he says.

Also, Masiyiwa commits considerable time to numerous charities and trusts, including the Rockefeller Foundation, AGRA, which represents smallholder farmers, the United Nations panel for sustainable energy and Kofi Annan’s Africa Progress Panel.

He was appointed by Bill Clinton to serve the Southern African Enterprise Development Fund and sits on the boards of the Nelson Mandela Advisory Committee and Endeavor SA.

One of the most respected Universities in the United States, Morehouse College, where civil rights leader Martin Luther King Junior was educated, recognized Masiyiwa’s humanitarian work and philanthropy with an honorary doctorate.

Perhaps most importantly, he supports 42,000 orphans in South Africa, Zimbabwe, Lesotho and Burundi through the Capernaum Trust, which he established with his wife Tsitsi.

Fellow Zimbabwean entrepreneur Tawanda Nyambirai, the founder and chief executive of TN Holdings, once called Masiyiwa an honest, generous, kind and humble man.

Together with British entrepreneur Richard Branson, Masiyiwa now also runs the Carbon War Room, an international non-profit organization, which helps entrepreneurs develop solutions to fight climate change.

“Strive is passionate about Africa gaining full economic freedom,” Branson wrote in his latest book Screw Business As Usual. He also credited Masiyiwa as one of the people responsible for the communications revolution.

No wonder Masiyiwa is often referred to as the Bill Gates of Africa—a backhanded compliment he takes in his stride.

“I thought Bill was the Strive Masiyiwa of America!” he quips.